That changed in the 2000s, when he first coined the BRIC acronym, and this decade is also looking bright, he says. “In some respects it is all about the U.S. and China swapping places, and it’s happening,” says Mr. O’Neill.
Manufacturing in the U.S. is starting to recover, while China is exporting less and driving up domestic demand. That makes for a healthier balance in the global economy.
“Compared to most people I speak to I seem to be still a lot more optimistic but it is a fallacy that I’ve always been optimistic.”
The former chief economist at Goldman Sachs — who left the bank earlier this year — is now taking a look beyond the BRICs to another set of countries likely to shine. That was for a series for BBC Radio about four emerging economies that could rise into the ranks of the top 10 global economies by 2050.
The anointed ones are Mexico, Indonesia, Nigeria and Turkey, or MINT: their uniting themes are favorable demographics and attractive economic prospects.
Yet they will never live up to the BRICs, he says, which will always remain much larger. In two years China alone creates more new wealth than the entire MINT gross domestic product combined. The largest economies in the MINTs are Mexico and Turkey, neither of which are expected to achieve China-like rates of growth, so the average is skewed. Nigeria, the smallest country in the group, is the one with most potential.
Curiously, however, the MINTs may have more in common with each other than the BRICs. While Brazil, Russia, India and China have gone to great ends to come up with a coordinated plan of action at global forums such as the G-20, there are always gaping differences. At last week’s World Trade Organization talks in Bali, India objected to a global trade pact supported by the other three nations.
“Mexico, Indonesia and Turkey all share very multi-dimensional trade patterns,” said Mr. O’Neill. People he spoke to in the MINT countries believe there is more natural affinity among MINTs than BRICs, he said.
The economist projects the BRICs will grow an average for 6.6% in the decade from 2011 to 2020, but that’s almost entirely down to China. He’s jokes that if he had to modify the BRICs at all, it would become the “C” — the only country that’s surpassed his expectations.
He’s very optimistic about the Chinese government’s efforts to move toward better quality growth at the expense of quantity. As a result, the pace of growth in China’s economy has come down somewhat, prompting concerns about the impact on the global economy. Mr. O’Neill says that China growing at a pace of around 7.5% is equivalent to the U.S. growing at 4% per year.
“People still don’t fully appreciate that,” Mr. O’Neill said.
There have been plenty of negative headlines on Brazil, Russia and India in the last few years. But that’s also been overblown, according to the banker. “If those countries show any vague acceleration, it is probably going to surprise people,” he said.
In the case of Brazil, the economist said he won’t be surprised if Brazil grows between 2.5% and 4.5% or 5%, next year. Quite a jump from 2012, when Brazil’s gross domestic product increased a revised 1.5%, still well below initial government projections of 4.5%. Economists in Brazil see growth of around 2.1% next year, according to the central bank’s latest weekly survey.
Mr. O’Neill says Brazil needs to adopt stronger supply side reforms and expects a pick-up in private investment in 2014 to drive a faster pace of growth.
As for China, the economist predicts GDP will probably grow between 7.5 to 8% in 2014.
Source Ref / Wall Street Journal